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CBAM Certificates: How They Work and What They Cost

CBAM certificates are the financial instrument at the heart of the Carbon Border Adjustment Mechanism. This guide explains how they are priced, purchased, and surrendered.

CBAM Certificates: How They Work and What They Cost

CBAM certificates are the core financial instrument of the Carbon Border Adjustment Mechanism. Understanding how they work is essential for both EU importers and their South African suppliers.

What is a CBAM Certificate?

A CBAM certificate represents one tonne of CO₂ equivalent embedded in imported goods. EU importers must:

  1. ▸Purchase CBAM certificates equal to the embedded emissions in their imports
  2. ▸Hold the certificates in their CBAM account in the EU CBAM Registry
  3. ▸Surrender the certificates by September 30 each year

How the Price is Set

The CBAM certificate price is set weekly by the European Commission, calculated as the average closing price of EU ETS allowances in the preceding calendar week. This mechanism directly links the CBAM price to the EU carbon market.

As of April 2026, the EU ETS price is approximately EUR 65.42/tCO₂, making CBAM certificates approximately EUR 65.42 per tonne of embedded CO₂.

The Certificate Lifecycle

Purchase: EU importers purchase certificates from their national competent authority at the weekly price. Importers can purchase certificates at any time during the year, allowing them to manage their exposure to price fluctuations.

Holding: Certificates are held in the importer's CBAM account in the EU CBAM Registry. The registry tracks holdings in real time.

Surrender: By September 30 each year, importers must surrender certificates equal to the embedded emissions in their imports during the previous calendar year. The annual CBAM declaration, submitted by March 31, establishes the exact quantity of certificates required.

Cancellation: Surrendered certificates are cancelled and cannot be reused.

Resale: Unused certificates can be sold back to the national competent authority within 30 days of the surrender deadline. They cannot be sold to other importers.

Price Forecast

EU ETS prices are expected to rise significantly over the coming decade as the EU tightens its emissions cap:

| Year | Forecast ETS Price | |------|-------------------| | 2026 | EUR 60–75/tCO₂ | | 2027 | EUR 70–90/tCO₂ | | 2028 | EUR 80–100/tCO₂ | | 2030 | EUR 100–150/tCO₂ |

For SA exporters, this means CBAM liabilities will increase significantly over time, making early decarbonisation investment increasingly valuable.

For a complete CBAM compliance registration pathway, visit the Digital Product Passport Registry.

Frequently Asked Questions

What is a CBAM certificate?
A CBAM certificate is a financial instrument that represents one tonne of CO₂ equivalent embedded in imported goods. EU importers must purchase and surrender CBAM certificates equal to the embedded emissions in their CBAM-covered imports.
How is the CBAM certificate price set?
The CBAM certificate price is set weekly by the European Commission, based on the average closing price of EU ETS allowances in the preceding week. This links the CBAM price directly to the EU carbon market.
Where do EU importers buy CBAM certificates?
CBAM certificates are purchased from the national competent authority of the EU member state where the importer is established. Each member state has designated a national authority responsible for CBAM certificate sales.
Can CBAM certificates be traded between importers?
No. CBAM certificates cannot be traded between importers. They can only be purchased from national competent authorities and surrendered to those same authorities. Unused certificates can be sold back to the national authority within 30 days of the surrender deadline.
What happens to CBAM certificates after they are surrendered?
Surrendered CBAM certificates are cancelled — they cannot be reused. The proceeds from certificate sales are retained by EU member states and are expected to be used for climate-related purposes.
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